CEZ offered another part of the "rainbow"

CEZ electricity provider offered another part of its "rainbow electricity" to distribution companies yesterday. The offer consists of three new products so called "green electricity" - broadband electricity supplied throughout the entire year on weekdays at the price of 88 hallers (approx. 2 cents) per kWh, so called red electricity broadband electricity supplied on a monthly basis at an average price of 82 hallers per kWh and so called blue electricity - broadband electricity supplied on weekdays on a monthly basis at an average price of less than 82 hallers per kWh. The prices of all the products are considerably bellow the average cost of electricity this year, for which the regulating body set the average price at 97 hallers per kWh.

These are the new products included in the CEZ offer for the next year, which CEZ prepared for its customers in connection with the newly opened market. Each product is characterised by a specific colour and is also priced differently. Each of the colours represents not only a different product, but also a certain specific part of the production output of CEZ-operated power plants that contribute to the supply. CEZ offers the individual "colours" in sequence and the launch of the last product is projected for the beginning of November this year. The four products which CEZ has offered so far account for more than 60% of the electric output CEZ supplied to the domestic market this year.

At the beginning of September CEZ offered the first product to the distribution companies the cheapest, so called yellow electricity. This is broadband electricity supply for the entire next year (non-stop supply of unvaried electricity volume for 24 hours a day, 365 days a year) at the cost of 73 hallers./kWh which will be procured by the most cost-effective resources of CEZ nuclear and coal-fired thermal power plants. The cost of similar energy supply in the markets west of the Czech Republic, or on the Polish market, ranges between 78 - 80 hallers/kWh.

All electricity distributors, with the sole exception of Severomoravska energetika (SME South Moravian Energy Distributor ), decided to accept the offer of this cheap electricity supply. The remaining approx. 2.6 TWh of unconsumed electricity was subsequently offered to all potential interested parties by means of a public tender. The interested parties include distribution companies, authorised customers and authorised dealers. The registration of potential interested parties was concluded on Tuesday, September 25, and a total of 16 entities decided to participate in the process. The second stage of the tender - the submission of proposals will take place on Wednesday (October 3, 2001).

"We are glad the offer had such a positive response. We believe that the interest will also influence the retail price, because the distributors now have the opportunity to optimise the purchases of electricity in their area", said Ladislav Kriz, CEZ Press Officer, in connection with this topic.

The CEZ offer is preferentially targeted at distribution companies, because they represent their protected customers who cannot choose their supplier. These account for 70 % of the market, whose demand is to be satisfied by the cheapest supplies from the distributors. The supplied electricity which is not consumed by the distribution companies will be offered to all other interested parties, as was the case with the above-mentioned product, so called cheapest yellow electricity. The other interested parties include licensed dealers, authorised customers and then again distribution companies. Each of the products CEZ offers has small electricity volume as a reserve, so that the public tender could be carried out even if all the distributors exercise their right to priority choice. The essential priority of CEZ is to provide a wide range of products, so that each potential client could choose.

CEZ aims to outdo its competitors in the following four areas: price, reliable services (which are now taken for granted, but this will change with the first bankruptcy in this field, as was the case with banks, travel agencies or cooperative savings banks), environmentally-friendly production (all power plants operated by CEZ comply with similar ecological requirements as their western competitors) and the fact that the electricity is generated exclusively in the Czech territory and relies on Czech suppliers (coal providers, engineering companies, etc.)

CEZ sees the newly opened market as an opportunity for valorizing the relatively cheap electricity generated by its power plants. However, this will only be possible if the Czech producers have the same conditions, both on the domestic market and abroad, as the foreign producers.

CEZ will aim at making the market accessible to all potential customers, including households, as soon as possible. It will also aim to help create favorable conditions for establishing a long-term efficient and competitive power system in the Czech Republic, which would be used by domestic customers.

Ladislav Krizpress, spokesman of CEZ

27. 9. 2001